How to Save Money!
(This article is written by Cr Whitfield and is purely for information and you should consult with your own trusted professionals before making any important life decisions)
Around half the workforce is getting a pay rise this year, but those rises are small and will barely keep up with the increased utility bills, taxes and rate increases. Pensioners received an extra $9 a week in March and again that is not going to stretch too far!
However there are always positives and here is a selection of ways that you could save some money, most of which are common sense.
The most recent census (2016) told us that the median weekly household income in the City of Rockingham was $1555 (this is total household) . The median monthly mortgage repayments were $1950 and the median weekly rent was $350.
Of those with mortgages, 10 per cent were experiencing mortgage stress, with mortgage repayments more than 30 per cent of household income. A similar proportion experienced rental stress.
Saving money on your mortgage seems like the first place to start.
Nathan Osinski is a Baldivis based mortgage broker and he gave the following advice ( he was very clear to remind you that the information is general in nature and should speak to their broker or banker to get specific advice for their situation) which might help you.
- Nathan commented that there are lots of Keystart loans around Rockingham. Their current interest rate would be 5.16%. If their mortgage was $350,000 their repayments should be around $1913.25 per month.If they could refinance to a regular lender with an average rate of 3.99% their repayment would drop to $1668.94 per month. This could save you over $240 a month.
- If people pay monthly they should consider switching to fortnightly or weekly. This could save people over 4 years off the life of their loan and 10’s of thousands of dollars in interest
- If people have an offset account they could move their money from savings account earning less than 1% on average (which they then pay tax on)to their offset account which will save them in interest on their home loan to the equivalent of the interest rate they are paying (and they don’t pay tax on that saving). If they don’t have an offset but a redraw account the same can be achieved by putting money in to their redraw. This could save thousands of your home loan.
- Banks are keen to attract new business, but also do not like to lose existing customers. “Ring your current lender and tell them you have seen better deals elsewhere,” Nathan advises .“Quote them, and ask what they can do. You might get a better rate on the spot.” This could save you thousands.
What about the renters?
In 2016 (the date of the most recent census) the median rent was $385 a week in Baldivis.
However this figure has decreased to $340 with the property market not having the best few years. What this does mean though is that Renters are in a great position at the moment as there are hundreds of rental properties on the market throughout the City and this is a great opportunity for you to approach your current landlord to negotiate a rent reduction when your next contract is due, or to consider looking at other properties instead. You never know unless you ask.
Save hundreds off your gas bill.
This one seems like the easiest way to instantly save hundreds of dollars a year and this is for home owners or renters to take advantage of the many gas deals that are around at the moment. The gas suppliers are tripping over themselves to win your business. The beauty is that the gas companies all use the same pipes and to change over is very simple, again you can even just call up your current gas supplier!
Choose from AGL, Alinta and Kleenheat.
What about your mobile phone and internet provider.
When was the last time that you researched your mobile usage and compared with other plans?? How many of us just automatically renew our contract at the end without looking at other available options.
You could save hundreds by simply checking out a few websites that do all the hard work for you, here are some but there are plenty more –
Food Shopping and Food in general.
- Are you eating out a lot?
- Are leftovers going to waste?
- Are you spending a lot of money on store-bought bread or other staples when you could bake yourself?
- Could you include a few more meatless meals in the week’s menu and stay under budget?
We all have our own lifestyles, food choices and preferences. What remains the constant though is that the best advice always points you to spend within your means and to remember how much food we actually waste in general , does this mean that we could be better prepared?
Take a look at some of this infographics from a comprehensive study undertaken in NSW-
As a Nation we are wasting food, and here in Rockingham this will also apply, what can we do to to save money?
- Prepare a budget and a list, only get the items on that list. There is a reason why the milk fridge is normally at the back of the store, it is to encourage you to buy things that you did not come into the store for!
- Cook more instead of eating out.
- Prepare meals in advance and freeze them for use at a later date.
What about petrol costs.
Everybody knows that the worst day to buy fuel is on a Tuesday locally, yet the message does not seem to be getting through if you go by the number of people who still pop down to the servo on a tuesday.
Don’t carry round unnecessary weight
Just like your body, your car needs more fuel to move around more weight. So, just as you wouldn’t wear a heavy rucksack unless you had to, don’t cart stuff around in the boot of your car unless you need it. Ironically, the heavier the item (the usual culprits are golf clubs and trolleys), the less likely you are to bother taking it out of the boot and the greater the effect it will have on your fuel consumption.
The perfect way to travel is at a constant speed (ideally around 50mph), and in the highest gear (five or six). So if you’re a patient driver, you’ll have lower fuel bills – it’s as simple as that. It’s unrealistic to avoid overtaking, but there’s little point accelerating past a car to simply be in front of it at the next set of lights – any instant gratification will appear on your fuel bill the next time you fill up.
Turn the air-conditioning off
It’s tempting to leave the air-con on the whole year round. It stops the windows misting up in the winter and you don’t ever need to think about the temperature inside the car, but it uses quite a bit of fuel, so we’d advise you turn it off when it’s not hot (on most cars the button has a snowflake symbol).
Check your tyre pressures regularly
The lower the tyre pressure, the more fuel the car needs to move it down the road. We recommend that you take five minutes every fortnight to check the tyres. If you’re not sure what the pressure should be, you can normally find the figures near the lock inside the driver’s door.
“Bill shock” is a common problem for Australian families – but using a bill smoothing strategy can help reduce financial stress. Bill shock is the negative reaction a customer feels when they receive a bill that contains unexpected charges or an unexpectedly high amount to be paid. It’s a phrase commonly used about phone bills in the telecommunications industry, as well as electricity bills, water bills and even rates.
Bill smoothing is a way of paying smaller amounts more frequently to the provider who is billing you, rather than paying one large bill a few times a year. This can be done in two ways: a formal payment plan with the service provider, or informally making more frequent payments on your own.
With the formal bill smoothing structure, the provider creates a payment plan where you pay a portion of an estimated bill at regular intervals. It works by calculating the total estimated cost of your energy bills for the next 12 months and then splitting the amount into equal weekly, fortnightly, or monthly payments.
How to do your own bill smoothing
If you find paying small amounts regularly an easier form of budgeting, you can easily do your own “bill smoothing” by setting up regular BPay deposits towards your usual large bills. That way, when you receive your actual bill in the mail, there should not be too much left to pay.
Feedback from residents.
On social media I asked residents to put forward their tips and here are some for you, in no particular order.
- The biggest singular response from Rockingham residents was to buy a copy of the Barefoot investor. I do not normally agree with promoting one product over another but this book seems to have changed so many rockingham residents lives and may well be worth the purchase price if the numerous recommendations are anything to go by.
- Cook once , eat twice. Make double the quantity and freeze the leftovers – thanks to Susan Seyers
- Consider renting a room out to reduce costs and Put 10 a week aside for chrissy. It literally turns chrissy from a stressfest into a calm time. You have money for food, incidentals, extras. And try to buy your gifts in the July sales. And dont buy your kids/grandkids too much!! They really, really do not need, appreciate, or have the capacity to utilise many many things. Ironically sometimes us parents on low incomes try to overcompensate at chrissy.. its not worth it. A couple of gifts and a couple of special days out or special family meals over the christmas holiday where they make memories is better – thanks to Angie Dee
- Recently discovered that RAC members get 5% off of Wish Cards so you can purchase a gift card and use that to do your shopping and save money – thanks to Zoe Carr.
- Home brand will come out the rear end the same as name brands. Buy bulk especially when it comes to toilet paper, paper towels and cheese etc…. Sign up to every loyalty program especially fly buys and activate every offer – thanks to Brayden Ricetti
- Swap lightbulbs to energy efficient ones, turn off appliances that are in “stand-by” turn off phone chargers when not in use. thanks to Chris Adams
- Know where your money is going. I use a service called Pocketsmith. It is a cloud based personal finance app. For 10 bucks a month it imports all your transactions from your internet banking automatically and categorises your expenses based on matching rules you set up (even that process is damn near automatic). Its budgeting without having to do any work… Just login every now and then to check how your’re doing and forecast what your bank balance is going to look like in the future based on past spending trends. – thanks to Ben Ponting.
- Move all credit cards debts onto 1 with the 12/18 months balance transfer interest free period set your monthly payment so it’s paid off before the higher interest is applied thanks to Grant Brown
- Do you need foxtel and the apple TV/fetch etc?? Work out what you actually watch and work out how much it actually costs you.
The City of Rockingham has been successful in receiving funding from the Department of Sport and Recreation to administer the KidSport program.
KidSport makes it possible for eligible children to join a not-for-profit sport or recreation club, by contributing up to $150 towards club registration and other agreed fees.
To be eligible, children must:
- Live within the City of Rockingham
- Be aged 5-18 years
- Have a Health Care Card or Pension Concession Card
If you do not have a Health Care Card or Pension Concession Card, but suffer from financial difficulty, please contact the City to determine if you are eligible to receive funding.
Applicants can apply for KidSport funding to pay fees for a number of registered clubs. Funding is only available to cover fees of clubs that are registered for KidSport with the City of Rockingham. The list of registered clubs is continually growing, so if the club you would like to join is not currently registered, please contact our Club Development Officer on 9528 0333 to discuss if it is eligible to become a registered club.
Reduce your vices
Do you smoke ? Drink? Have an addiction to coffee? Whatever your vice, make a conscious effort to cut back. Healthy and wealthy – a double benefit!
Say no and don’t feel pressured to do what everyone else is doing
Don’t feel pressured by friends, kids or colleagues into spending money you don’t have. It’s okay to say “no” now and then!
Make school lunches at home
If you have children, then making school lunches at home rather than using the tuckshop could save hundreds of dollars as well.
Bottle your own water
There’s something satisfying about bottled water, but that doesn’t mean you have to buy a new bottle every day. Buy the bottle and then subsequently refill it from a tap or water cooler.
Go grocery shopping on a full stomach
Studies show that hunger may cause you to buy extra or unnecessary items while doing your weekly grocery shop. Save money by eating beforehand.
Pay your bills on time and avoid late fees – they can be $10 or more per bill
Paying your bills on time is also a great way to keep your credit record clean. If you struggle with your bills, set up a regular repayment amount to even out the cashflow.
Check how much interest you are paying on your credit card
If you owe money on your credit card, check what interest rate you are paying. Credit card interest rates can vary from less than 10% to more than 22% and on a $3,000 ongoing debt, that difference could save you more than $300 per annum.
Shop around for your car insurance
The cost of a comprehensive insurance policy can vary by over one thousand dollars per annum!
Sell pre-loved items on eBay
This will help fund new purchases. Alternatively, spring clean your home and have a garage sale.
Install energy-efficient light bulbs
Changing out your old light bulbs for LED bulbs can save you a fair amount of money over the course of the year. They’re more efficient, don’t heat up, and can last for decades.
Choose energy-efficient appliances
Another note about those appliances we mentioned earlier; when it does come to buying a new one, try and find the most energy efficient one you can. It’ll save you money on your electricity bill.
Clean off the top of your fridge
Poor ventilation can make your fridge less energy efficient, costing you more on your electricity bill.
Clean your car’s air filter
If your air filter is dirty and clogged, cleaning it can improve your car’s performance and fuel efficiency by up to 10%, which will save you heaps of money on petrol.
Cancel memberships you don’t use
If you’ve got a gym membership, sports club membership, or something similar that you’re paying for but not using, cancel that ASAP. You’re just throwing money away.
Try working off cash only
No credit, no EFTPOS. Simply with draw the cash you need for the week, and make it last. And always ask for a discount!
Start a coin jar!
Throwing your silver and gold into a (non-opening) coin jar each day can build up very quickly.
Go to free events
If you’re stuck looking for something to do on a sleepy weekend, look around for free events such as a farmers market or a free concert in a park. Many neighbourhoods will have similar events going on at least semi-regularly.
Don’t make big purchases instantly
Implement the 30-day rule, and wait for 30 days before making any non-necessary big purchase. It’ll help you avoid impulse buys, and in turn will save you money.
Next time you go to the supermarket, consider buying the cheaper generic-brand version of some of the things on your list. There’s generally little to no difference in quality, but a significant difference in price. Also think about switching supermarkets to save some dollars.
Other Help available.
These free money courses might be of benefit to you, whilst writing this article I used this link and found that there is a course due to start at Cockburn soon (as an example)
The Federal government has online tools to assist you – https://www.humanservices.gov.au/individuals/subjects/managing-your-money-build-savings
In an ideal world we would be able to do the following with our money –
The re-occurring theme throughout this article is that we all generally get very comfortable with our current bank, utility supplier, telco and preferred shopping location. If you only take one thing from this general article please make sure that you challenge the status quo! Call up your current suppliers and ask for a review!
I hope this is of some help to you, even if you only do one of these things and save a little bit of money then that is a winner.